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Part 3: Signing in to the digital age

Japan’s tech industry has changing the global digital landscape in recent decades. From robotic servers at food chains to using technology for sustainability efforts for the Olympics 2021 project, Japan are leading the charge with tech.

As a pioneering hub for technology, it is only fitting that their legal processes be keeping up with the times. Japan’s Act on Electronic Signatures and Certification Business governs the legality of electronic signatures for certified business transactions.

Japan has recognised e-signatures as a legal form of signing since 2000,  giving businesses the option to use them whilst trading.

However, the degree of legality that an electronic signature holds in Japan must meet the requirements as stated in the Act. 

Read on to learn more about the legal compliance for electronic signatures in Japan specifically, and watch out for more in this series on Southeast Asia, Hong Kong, China, New Zealand, Australia, UK, Cayman Islands, and BVI. 

Japan’s Electronic Signature Requirements 

The use of electronic signatures is under the compliance of the Act on Electronic Signatures and Certification Business. Japan also adopts a tiered Electronic Signature legal model.

The Rules

Contracts are valid if parties reach an agreement, whether they agree verbally, electronically, or in a physical document (e.g. paper) . 

The Japan E-signature Law recognises electronic signatures as a method of entering into agreements, including conditions for the presumption of legal authenticity.

Applicability of an Electronic Signature 

To prove a valid contract, parties often must present evidence in court. In general, Japanese courts have broad discretion in admitting and evaluating evidence. Leading digital transaction management solutions may be able to provide electronic records that are admissible as evidence, to help support the existence, authenticity and valid acceptance of a contract.

Under Chapter II :Presumption of Authentic Establishment of Electromagnetic Record of the Act, Article 3 states, ‘Any electromagnetic record that is made in order to express information (except for that prepared by a public official in the course of duties) shall be presumed to be established authentically if the Electronic Signature (limited to that which can be performed by the principal through appropriate management of codes and properties necessary to perform this) is performed by the principal with respect to information recorded in such electromagnetic record.’

Japanese e-signature law sees electronic signatures as a legitimate method of entering into agreements and in general; Japanese courts give generous discretion in admitting and evaluating evidence. This means that Qualified Electronic Signatures are seen as a legal type of e-signature. But this doesn’t mean that a non-QES e-Signature can’t be submitted in court, it simply means there will be extra evidence needed to support it.

Use Cases for E-sign

Instances where e-signatures are generally considered appropriate:

  • IP Transfer agreements
  • consumer agreements
  • certain HR documents, like new employee onboarding processes
  • general lease agreements
  • commercial agreements including NDAs and sales agreements

Use Cases Requiring a Physical Signature 

There are some cases where a handwritten signature are still required. Examples include:

  • some fixed term real estate lease agreements (Act on Land and Building Leases)voluntary guardianship contracts (Act on Voluntary Guardianship Contract)
  • testamentary documents (Civil Code)
  • some government filings under a power of attorney

Japan’s Act on Electronic Signatures and Certification Business states “An e-signature is a measure taken with respect to information that can be recorded in an electromagnetic record (a record in electronic, magnetic or any other form not perceivable by human senses and that is used for information processing by computers), and that falls under both of the following requirements: It indicates that the person who has taken the measure created the information. It confirms whether the information has been altered.”

This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

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Read more from the E-Signature Series:
Part 2: Singapore
Part 1: Hong Kong

READ MORE: Is e-signing legally binding? 

EBOOK: E-signatures